KCS Energy obtains $90 million credit facility

By Sara Rosenberg

New York, Jan. 15 - KCS Energy Inc. completed the amendment and restatement of its credit agreement, which now provides a borrowing capacity of $90 million.

The credit facility consists of a $40 million term loan and a $50 million revolver, both maturing on Oct. 3, 2005. One third of the facility has an interest rate of Libor plus 275 to 300 basis points. The remaining two-thirds of the loan has an interest rate that is based on the prime rate, which initially equates to 9%, and increases annually, according to a news release.

Initial proceeds of $69.3 million were used to pay off the Houston energy company's maturing senior notes, leaving $20.7 million of availability under the credit facility.

"We are very pleased to complete the financing and pay off our senior note obligations. KCS enters 2003 with renewed financial flexibility, a sizable inventory of drilling prospects, and a strong natural gas and oil price environment. With the financing complete, we have established an initial capital budget for 2003 of $45-$50 million," said James W. Christmas, president and chief executive officer, in the release.

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